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The digital transformation of the Australian economy

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The Australian economy is adapting technologically to a "new normal" brought on by world-changing events (Image by Dan Jensen)

The current pandemic, but also the previous Great Financial Crisis as well as an increase in more severe climatological events such as bushfires and floods, are all clear indications that we cannot just continue managing our society and our economy as usual.

If one thing is becoming clear, we cannot go back to “normal” as some of our politicians still seem to pursue.

Thanks to the pandemic, we now get access to the top brains of the world who are willing to participate in Zoom sessions available to wide audiences. Before the pandemic, there were all those conferences we went to, but rarely did we get access to the top people. They simply do not have the time to fly around to present at conferences. However, many of them are happy to participate at the new video conferencing facilities that have sprung up.

I am often stimulated to write articles and blogs based on the insights provided by such giants. It is great to be able to stand on their shoulders.

For this topic, I would like to mention the insights from Andrew Liveris AO, the former chairman and CEO of the chemical giant the Dow chemical company. He spoke at a webinar organised by the University of Queensland (UQ) titled: ‘A new global economy — are we entering a new industrial revolution?’

It was refreshing to hear such a stalwart addressing issues such as climate change, inequality, global politics and so on.

A key thread throughout the issues he addressed was “digital transformation”. He stressed that this should no longer be a standalone “technical” issue. By now, it should have become a “normal” tool for any organisation. Digital technologies, high-speed broadband, AI, machine learning and robotisation are all tools that organisations need to integrate into their daily base of operation.

Data has become the new utility that is essential to be able to operate in our rapidly changing environments. Therefore, on the labour side, we need “new collar workers” — people that are skilled to work with these tools and interface with them.

While the title of the webinar mentioned ‘industrial revolution’, it clearly applies to all sectors of our society and our economy, be it education, healthcare, manufacturing, government, finance and so on.

In the “new world order” we are entering with disruptions such as the pandemic, climate change, geopolitical shifts and trade wars, it is essential that all organisations can operate on a “pivotal” basis. He also mentioned here “pop-up solutions” — I think that also neatly highlights the sort of new flexible strategies that are needed.

The CEO of UniQuest (the commercial arm of UQ), Dr Dean Moss, mentioned that the rapid decision of UQ to start developing a COVID-19 vaccine is an example of a pivotal strategy.

It is becoming very clear that organisations will need to instantly be able to change their strategies and operations to deal with the massive disruptions that they are experiencing and which will become a new normal going forwards. This can only be done if the organisations have the right data on which they can base their decision-making processes to face these challenges. A few months ago, I addressed the data issues in a separate article.

Professor Deborah Terry AO, Vice-Chancellor and President of UQ, added a very interesting element to the developments of big data. As data becomes such an integral element of all sectors of our society, ethical issues are becoming even more important than technical issues.

As a society, we are already struggling with privacy, security, cybercrime and surveillance. While S.T.E.M. education (science, technology, engineering and math) is important for Australia to show technical leadership in the digital transformation, humanitarian studies are becoming even more important in this process. Recent government policies have clearly missed the importance of this combination by downgrading humanitarian studies and making them more expensive. “Deep expertise and so-called soft skills” were the terms she used that very well describe the need for both.

Andrew several times also mentioned the fact that “cannibalisation” will have to be an upfront strategy in these processes. As we have seen in the past and very specifically in the telecoms, entertainment and publishing sectors is that companies have been reluctant to do so. They often prefer to try and protect their old businesses for as long as possible which then prevent them to take on leadership in the new industries that are emerging.

Back to Andrew, he was – like me and I am sure many of you – frustrated by the lack of national leadership to facilitate the transformations that are required. We need national plans for this. Previously, I have addressed the various sectors that are in desperate need of national plans: communications (such as the NBN), energy (smart energy), manufacturing, healthcare (telehealth) and education.

There was an opportunity for questions to be answered afterwards and this is the one that I did send to Andrew:

In this time of transformation, we need the leadership in providing the vision and perhaps a broad strategy. Over the last decade, that leadership has looked more like a fire brigade addressing bushfires. Should academia and business come together and form small groups of experts and discuss the need for national plans facilitated by the digital transformation? They could discuss this with ministers across the spectrum as well as their top advisors (based on the horizonal level you mentioned, rather than on a silo basis).

 

Across that ministerial spectrum we could mention to them the enormous advantages of digital transformation across all departments for the development of national plans for industry, energy, sustainability, communications which are essential to lift Australia at scale on to the world stage.

 

 

 

I have done this at the start of the NBN and was very successful, but unfortunately, subsequent politics unravelled the national plan. We did the same with the electricity companies in relation to national smart energy plan, but also here politics scuttled that plan. There was the start of a national innovation strategy, also without any follow up. How can we break through this dreadful situation and can academia and business assist in forcing progress? I would very much appreciate Andrew's view on this.

I would like to add to this: what hope do we have in getting any transformative policies from this government? It seems to be stuck in the past, preferring to fight rear-mirror battles. Apart from the missed example mentioned above, it has recently also launched a study to build a new coal-fired power station.

Another very interesting point that Andrew made was rather than having each Australian company, each government department, each city and each state looking at their own internal transformation plans, we should look at a collaborative national transformation plan.

We need to upscale Australia holistically. Competition has become global and despite trade wars, globalisation is the only way forward. There should be widespread collaboration across all sectors (again, the issue of silo-busting). This is essential if we want to maintain our position on the world stage both from a societal as well as an economic point of view.

Interestingly, I recently also discussed global collaboration with my international colleagues. The issue here was that because of the difference in values, it makes this increasingly more difficult, yet there is no other way forward. For starters, the countries with liberal democratic values (Europe, USA, Canada, Australia, New Zealand, India, Japan, South Korea) should start working together far more strategically.

Paul Budde is an Independent Australia columnist and managing director of Paul Budde Consulting, an independent telecommunications research and consultancy organisation. You can follow Paul on Twitter @PaulBudde.

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